UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the quarterly period ended:             JULY 31, 2006
                                       or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE OF SECURITIES EXCHANGE
ACT OF 1934

For the transition period from _____________________ to ________________________

                         Commission File Number: 0-22011

                         SYNOVICS PHARMACEUTICALS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            NEVADA                                              86-0760991
-------------------------------                            ---------------------
(STATE OR OTHER JURISDICTION OF                               I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                             IDENTIFICATION NUMBER

2575 E. CAMELBACK RD., SUITE 450  PHOENIX, ARIZONA                     85016
--------------------------------------------------                   ---------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                             (ZIP CODE)

                                  602-508-0112
              ----------------------------------------------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                                                 Yes [X]  No [ ]

         Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act. (Check one):

Large accelerated filer [ ]    Accelerated Filer [ ]   Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                                                 Yes [ ]  No [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of September 10, 2006 there were 26,044,630 shares of common stock
outstanding.

<PAGE>

                         SYNOVICS PHARMACEUTICALS, INC.
                            INDEX TO QUARTERLY REPORT
                                  ON FORM 10-Q

                                                                            PAGE

PART I - FINANCIAL INFORMATION

ITEM I.  Financial Statements.

                                   (UNAUDITED)

         Condensed Consolidated Balance Sheets                               3
         Condensed Consolidated Statements of Operations                     4
         Condensed Consolidated Statements of Cash Flows                     5
         Notes to Condensed Consolidated Financial Statements                6

ITEM 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.                                          13

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.         20

ITEM 4.  Controls and Procedures.                                            21


PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings.                                                  21

ITEM 1A. Risk Factors.                                                       21

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds.        22

ITEM 3.  Defaults upon Senior Securities.                                    22

ITEM 4.  Submission of Matters to a Vote of Security Holders.                22

ITEM 5.  Other Information.                                                  22

ITEM 6.  Exhibits.                                                           23

SIGNATURES                                                                   25

<PAGE>

SYNOVICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                           JULY 31,          OCTOBER 31,
                                                                             2006               2005
                                                                         ------------       ------------
ASSETS                                                                    Unaudited           Audited
<S>                                                                      <C>                <C>
CURRENT ASSETS:
  Cash and cash equivalents                                              $  4,218,739       $    128,819
  Trade receivables                                                         1,176,000                  -
  Inventory                                                                 2,989,000              4,010
  Prepaid expenses and other current assets                                   586,029            137,609
                                                                         ------------       ------------
                  Total Current Assets                                      8,969,768            270,438
                                                                         ------------       ------------

PROPERTY - Net of accumulated depreciation of $74,536
  and $70,689, respectively                                                 1,364,384              4,513
                                                                         ------------       ------------

OTHER ASSETS:
  Deposits on equipment                                                       320,242            234,494
  Deposits on purchase agreement                                                    -            200,000
  Deferred financing fees                                                   2,270,913            375,042
  Note receivable - long term                                                 150,000                  -
  Security deposits                                                           145,548                  -
  Patents  - net of accumulated amortization of
   $335,539 and $312,816, respectively                                     15,722,426         14,600,149
  Investment in InCon Processing, LLC                                               -          1,226,919
  Goodwill                                                                 11,166,392                  -
                                                                         ------------       ------------
                  Total Other Assets                                       29,775,521         16,636,604
                                                                         ------------       ------------

TOTAL                                                                    $ 40,109,674       $ 16,911,555
                                                                         ============       ============


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                       $  3,183,609       $  1,007,570
  Notes payable - shareholders and others                                     101,952          1,452,100
  Convertible bridge notes - current portion                                2,587,458                  -
  Accrued interest to shareholders                                                  -            731,792
  Other accrued liabilities                                                 2,486,383            992,362
                                                                         ------------       ------------
                  Total current liabilities                                 8,359,402          4,183,824
                                                                         ------------       ------------

LONG-TERM LIABILITIES:
  Convertible bridge notes                                                  1,080,403          1,423,980
  Long term debt                                                           13,500,000                  -
  Long term leases                                                            244,000                  -
                                                                         ------------       ------------
                  Total liabilities                                        23,183,805          5,607,804
                                                                         ------------       ------------

STOCKHOLDERS' EQUITY
  Preferred stock - $.001 par value - authorized, 5,000,000 shares;
     591,850 and 591,850 issued and outstanding, respectively
     (liquidation preference of $798,998)                                     798,998            798,998
  Common stock - $.001 par value - authorized, 45,000,000 shares;
     22,044,630 and 22,681,725 issued and outstanding, respectively            26,044             22,681
  Additional paid-in capital                                               62,035,012         54,802,634
  Warrants                                                                  4,065,481            511,650
  Accumulated deficit                                                     (49,814,866)       (44,832,212)
  Common stock in treasury                                                   (184,800)                 -
                                                                         ------------       ------------
                  Total stockholders' equity                               16,925,869         11,303,751
                                                                         ------------       ------------

TOTAL                                                                    $ 40,109,674       $ 16,911,555
                                                                         ============       ============
</TABLE>

<PAGE>

SYNOVICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


<TABLE>
<CAPTION>
                                                                   THREE MONTHS                        NINE MONTHS
                                                                  ENDED JULY 31,                      ENDED JULY 31
                                                         ------------------------------      ------------------------------
                                                             2006              2005              2006              2005

<S>                                                      <C>               <C>               <C>               <C>
REVENUES:                                                $  5,354,000      $      2,564      $  5,356,115      $      7,656
                                                         ------------      ------------      ------------      ------------


COST OF REVENUES                                            3,886,668               382         3,887,003             1,221
                                                         ------------      ------------      ------------      ------------

                       Gross profit                         1,467,332             2,182         1,469,112             6,435
                                                         ------------      ------------      ------------      ------------


OPERATING EXPENSES:
     Research and development                                 570,942               210           895,429            13,166
     Selling, general and administrative                    1,445,511           167,255         2,826,986           708,345
                                                         ------------      ------------      ------------      ------------

                       Total operating expenses             2,016,453           167,465         3,722,415           721,511
                                                         ------------      ------------      ------------      ------------


OPERATING LOSS                                               (549,121)         (165,283)       (2,253,303)         (715,076)
                                                         ------------      ------------      ------------      ------------


OTHER INCOME (EXPENSES):
     Gain on debt forgiveness                                  31,017                 -            31,017                 -
     Other income                                                   -            10,293           140,000            13,695
     Interest expense, net                                 (1,013,395)           (2,466)       (1,858,249)           (5,011)
                                                         ------------      ------------      ------------      ------------

                       Total other (expenses) income         (982,378)            7,827        (1,687,232)            8,684
                                                         ------------      ------------      ------------      ------------


NET LOSS FROM CONTINUING OPERATIONS                        (1,531,499)         (157,456)       (3,940,535)         (706,392)
                                                         ------------      ------------      ------------      ------------


NET GAIN (LOSS) FROM DISCONTINUED OPERATIONS
     Equity in the loss of InCon Processing, LLC                    -            12,561        (1,042,119)         (217,176)
                                                         ------------      ------------      ------------      ------------


NET LOSS                                                 $ (1,531,499)     $   (144,895)     $ (4,982,654)     $   (923,568)
                                                         ============      ============      ============      ============

BASIC AND DILUTED NET LOSS PER COMMON SHARE

FROM CONTINUED OPERATIONS                                       (0.06)            (0.01)            (0.17)            (0.04)
                                                         ============      ============      ============      ============

FROM DISCONTINUED OPERATIONS                                        -                 -             (0.04)            (0.01)
                                                         ============      ============      ============      ============

NET LOSS PER SHARE                                              (0.06)            (0.01)            (0.21)            (0.05)
                                                         ============      ============      ============      ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING                                                25,276,999        21,671,424        23,556,323        19,195,741
                                                         ============      ============      ============      ============
</TABLE>


<PAGE>

SYNOVICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                         NINE MONTHS
                                                                                        ENDED JULY 31,
                                                                             ---------------------------------

                                                                                  2006                2005
                                                                             -------------        ------------
<S>                                                                          <C>                  <C>
OPERATING ACTIVITIES:
Net loss                                                                     $  (4,982,654)       $   (923,568)
Adjustments to reconcile net loss to cash used in operating activities:
  Depreciation and amortization                                                     26,570              23,753
  Equity in the loss of joint venture                                            1,042,119             217,176
  Stock based compensation                                                               -              43,750
  Amortization of bridge loan discount                                           1,094,216                   -
  Changes in operating assets and liabilities:
      Receivables                                                                  748,525                   -
      Inventory                                                                   (418,280)              1,242
      Prepaids and other current assets                                               (664)           (130,197)
      Other assets                                                                 (49,338)                  -
      Accounts payable                                                          (2,028,162)             50,670
      Accrued liabilities                                                        1,382,452             (81,217)
Net cash used in operating activities                                           (3,185,216)           (798,391)
                                                                             -------------        ------------


INVESTING ACTIVITIES:

  Capital expenditures                                                            (167,021)           (226,640)
  Acquisition activities                                                        (8,800,000)                  -
  Patent acquisitions                                                           (1,145,000)                  -
                                                                             -------------        ------------
Net cash used in investing activities                                          (10,112,021)           (226,640)
                                                                             -------------        ------------

FINANCING ACTIVITIES:
  Issuance of common stock                                                       5,640,000             457,900
  Proceeds from debt                                                            12,359,362                   -
  Repayment of debt                                                               (341,783)                  -
  Repayment of leases                                                             (270,422)                  -
                                                                             -------------        ------------
Net cash provided by financing activities                                       17,387,157             457,900
                                                                             -------------        ------------


NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                                                                 4,089,920            (567,131)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                     128,819             629,257
                                                                             -------------        ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                     $   4,218,739        $     62,126
                                                                             =============        ============

SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING
ACTIVITIES:
  Settlement of debt through issuance of common stock                           $2,394,000             $49,500
                                                                             =============        ============

 Rights to technology acquired through issuance of common stock                         $0         $13,800,000
                                                                             =============        ============
</TABLE>

<PAGE>

                         SYNOVICS PHARMACEUTICALS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note A -          BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

                  The accompanying  unaudited Condensed  Consolidated  Financial
                  Statements of Synovics  Pharmaceuticals,  Inc. (the "Company")
                  have been prepared in accordance  with  accounting  principles
                  generally accepted in the United States of America for interim
                  financial  information  and the  instructions  to  Form  10-Q.
                  Accordingly,  they  do not  include  all the  information  and
                  footnotes required by accounting principles generally accepted
                  in  the  United  States  of  America  for  complete  financial
                  statements.  In the  opinion of  management,  all  adjustments
                  (which include only normal recurring adjustments) necessary to
                  present fairly the financial  position,  results of operations
                  and cash flows for all periods  presented  have been made. The
                  results  of  operations  for the  three-month  and  nine-month
                  periods ended July 31, 2006 are not necessarily  indicative of
                  the operating results that may be expected for the entire year
                  ending   October   31,   2006.   These   unaudited   condensed
                  consolidated   financial   statements   should   be   read  in
                  conjunction  with  the  Company's  financial   statements  and
                  accompanying  notes  thereto  as of and  for  the  year  ended
                  October 31,  2005.  The  accompanying  condensed  consolidated
                  financial  statements  have been  prepared on a going  concern
                  basis,  which  contemplates  the realization of assets and the
                  satisfaction  of liabilities in the normal course of business.
                  The  Company  has  incurred  accumulated  operating  losses of
                  $49,814,866  through  July 31,  2006  which  have been  funded
                  through the issuance of stock and debt. The losses incurred to
                  date,   the   uncertainty   regarding  the  ability  to  raise
                  additional  capital and the  Company's  inability  to generate
                  gross profits and positive cash flows from operations indicate
                  that  the  Company  may  not be able  to  continue  as a going
                  concern for a reasonable period of time.

                  PRINCIPLES OF CONSOLIDATION

                  The consolidated  financial statements include the accounts of
                  Synovics   Pharmaceuticals,   Inc.   and  its   wholly   owned
                  subsidiaries,   including,   Kirk  Pharmaceuticals,   LLC  and
                  ANDAPharm,   LLC  acquired  in  May  2006   (collectively  the
                  "Company").  All significant  inter-company  transactions have
                  been eliminated in consolidation.

                  CONCENTRATIONS OF CREDIT RISK

                  The  Company   places  it  cash  balances  with  high  quality
                  financial institutions.  At times, such balances may be in the
                  excess  of the  FDIC

<PAGE>

                  insurance limit. The Company has not experienced any losses on
                  such  accounts and  management  believes  that there is little
                  risk of loss.

                  Accounts  receivable  are  reported  net of an  allowance  for
                  doubtful  accounts.  The  allowance  is based on  management's
                  estimate  of the amount of  receivables  that will be actually
                  collected.  Management performs on-going credit evaluations of
                  its  customers  and  provides  an  allowance  based on  credit
                  history  and  worthiness  of its  customers.  Receivables  are
                  written off when deemed uncollectible.

                  REVENUE RECOGNITION

                  The Company recognizes revenue upon shipment of product

                  INVENTORY

                  Inventories  are  stated  at  the  lower  of  cost  (first-in,
                  first-out method) or market.

Note B -          NET LOSS PER COMMON SHARE

                  Basic net loss per share is computed by dividing  the net loss
                  by the weighted  average  number of common shares  outstanding
                  during the presented  periods.  Diluted net loss per share has
                  not  been  presented  as it  was  anti-dilutive.  Options  and
                  warrants  are  excluded  from the  diluted  net loss per share
                  calculation, as they are anti-dilutive.

Note C -          LICENSE AGREEMENT

                  The Technology  License  Agreement  (the "License  Agreement")
                  dated   March   16,   2005    entered    into   with   Nostrum
                  Pharmaceuticals, Inc. ("Nostrum") and the Company, replaced in
                  its entirety  the Product  Development  and License  Agreement
                  dated  as  of  June  16,  2004.   Under  the  revised  License
                  Agreement,  the  Company  received  an  exclusive  license  to
                  develop and  commercialize ten 505(b)(2)  products  (brandable
                  pharmaceutical  products  that  qualify  for  filing  with the
                  United States Food and Drug Administration (the "FDA") under a
                  "505(b)(2)"  application  and ten  generic  products  (generic
                  bio-equivalents  of branded  products which qualify for filing
                  with the FDA pursuant to an Abbreviated New Drug Application))
                  under  the  Nostrum  Technology  (as  defined  in the  License
                  Agreement)  within a three year period.  As consideration  for
                  the License Agreement, the Company issued 12 million shares of
                  its common stock,  and agreed to pay Nostrum  royalties on net
                  sales of generic products equal to 50% of gross profit.  As of
                  July 31, 2006,  the Company has paid  $1,713,637 to Nostrum as
                  remuneration  for research and  development

<PAGE>

                  costs  associated  with the  licensed  technology,  as well as
                  advanced to Nostrum  $250,000 for future  invoices  associated
                  with the licensed technology.

Note D -          PURCHASE AGREEMENT

                  In July 2005,  the Company  entered into a Purchase  Agreement
                  (the   "Kirk    Purchase    Agreement")    to   acquire   Kirk
                  Pharmaceuticals,   LLC,  and  its  affiliate,  ANDAPharm,  LLC
                  (collectively,   "Kirk")  for   $12,000,000   in  cash  and  a
                  promissory  note.  Kirk  is  a  Florida  based  pharmaceutical
                  company that manufactures over-the-counter ("OTC") and generic
                  prescription drugs in its FDA and DEA approved facility.  Kirk
                  currently  manufactures  and/or  markets 30 OTC solid dose and
                  soft gel  pharmaceuticals  under  current  Good  Manufacturing
                  Practices  ("cGMP")  guidelines.  Kirk was founded in 1999 and
                  has grown to more than 100 people and occupies  70,000  square
                  feet of manufacturing space.

                  On May 22, 2006, the Company  consummated  the  acquisition of
                  Kirk, and is currently working with Kirk's existing management
                  to integrate the two companies.  The Company  anticipates that
                  Kirk will provide  potential  cash flow from its operations to
                  fund some of the Company's planned clinical trials and will be
                  the designated manufacturing facility for the Company.

                  The  Company  has  accounted  for this  acquisition  using the
                  purchase method.  The purchase price of the acquisition is set
                  forth below:

               Cash on closing                                   $   9,000,000
               Note payable to sellers                               3,000,000
               Estimated transaction costs incurred                    552,000
                                                                 -------------
               Total purchase price                              $  12,552,000
                                                                 =============


Assets Acquired:
   Current assets                                                $   5,718,981
   Non-current assets                                                1,378,655
Liabilities assumed                                                 (5,712,028)
                                                                 -------------
Net assets acquired                                              $   1,385,608
                                                                 -------------

Cost in excess of net assets acquired (recorded goodwill)           11,116,314
                                                                 -------------
Total estimated fair value of net assets acquired and
recorded goodwill                                                $  12,552,000
                                                                 =============

                  The Company is in the process of  completing  its  estimate of
                  the  allocation o f the  purchase  price to  identifiable  and
                  intangible   assets.  The  Company  expects  to  complete  the
                  purchase price allocation by October 31, 2006.

<PAGE>

Note E -          PLACEMENT AGENCY AGREEMENT

                  On September  27, 2005,  the Company  entered into a Placement
                  Agency  Agreement  with  Indigo  Securities  LLC,  a  Delaware
                  limited liability company ("Indigo") whereby, Indigo agreed to
                  act as the Registrant's  agent in connection with (i) the sale
                  by the Registrant of from  $5,000,000 to $10,000,000  million,
                  face amount of the Company's  10% Senior Notes,  to be offered
                  together with warrants, (ii) the sale (the "Bridge Financing")
                  by  the  Company  of up to  $2,500,000,  face  amount  of  the
                  Company's 9% Convertible Bridge Notes (the "Bridge Notes"), to
                  be offered together with warrants (the "Bridge  Warrants") and
                  (iii) the sale by the  Company of up to $5 million of Series A
                  Convertible  Preferred  Stock ("Series A Preferred  Stock") of
                  the  Company  together  with  warrants,  all of which  will be
                  offered on terms and conditions agreed upon by the Parties. As
                  of the date herein,  the Company has issued  $4,845,000  under
                  the 9%  Convertible  Bridge  Notes.  No  Series A  Convertible
                  Preferred Stock has been issued.

                  On May 23, 2006, the Company  provided  written notice that it
                  was terminating its Placement Agency Agreement.  All fees paid
                  thereto by the Company under the Placement Agency Agreement in
                  connection  with the Bridge Note  Placement are to be retained
                  by the Placement Agency.

                  The Company  disclosed that as a result of the consummation of
                  the acquisition of Kirk which was financed through the Bank of
                  India,  and the  $6,000,000  equity  investment  with  Maneesh
                  Pharmaceuticals  PVT  LTD.  ("Maneesh"),  the  Company  may be
                  required to repay its outstanding 9% Convertible Bridge Notes.
                  The  Company has  solicited  the consent of the holders of the
                  Convertible  Bridge Notes to convert  their Bridge Notes into,
                  and  exchange  their  Bridge  Notes for,  an  amended  form of
                  convertible note (the "Revised Note") accruing interest at the
                  rate of 9% per annum  and  convertible  into  shares of Common
                  Stock at the conversion  price of $2.50 per share. The Revised
                  Note shall  mature on April 3, 2009 and  constitute  unsecured
                  indebtedness  of  the  Company.  Of the  remaining  $2,695,000
                  aggregate  principal  amount of  Bridge  Notes,  $300,000  was
                  repaid on July 6, 2006 and the remaining  $2,395,000 aggregate
                  principal  amount and all accrued an unpaid  interest  due and
                  payable thereon matured and was payable on September 1, 2006.

                  The Company has not yet paid any amounts due to the holders of
                  Bridge Notes on September 1, 2006 and has  requested  that the
                  holders of such Bridge Notes agree to extend the maturity date
                  thereof  to  November  1, 2006.  In  exchange  therefore,  the
                  Company  has  offered to  increase  the  interest  rate on the
                  outstanding  principal  amount to 18% per annum for the period
                  of such extension, as well as reduce the exercise price of the
                  warrants  originally issued to such holders at the time of the
                  sale of the Bridge Notes to $2.50 per share.

<PAGE>

                  In the event that any holders of the Bridge Notes rejects such
                  extension,  the  Company  would be in default  of such  Bridge
                  Notes and would be required to  immediately  repay all amounts
                  due thereunder,  which repayment would have a material adverse
                  effect on the financial condition of the Company.

                  The Company is in discussions with unaffiliated  third parties
                  to  provide  additional  financing,  although  there can be no
                  assurance  that such  financing  will be available on a timely
                  basis, on commercially reasonable terms, or at all.

Note F -          LEASED FACILITIES

                  The Company leases office space in Ft. Lauderdale, FL, Edison,
                  NJ and  Phoenix,  AZ.  Total  monthly  rent  is  approximately
                  $37,042  under the lease  agreements,  which expire at various
                  dates throughout 2009.

                  Twelve Months
                  Ending October 31,
                  ------------------

                        2007         $405,020

                        2008          106,390
                                     --------
                                     $511,410
                                     ========

Note G -          METFORMIN

                  On May 17, 2006,  the Company  announced  that it had obtained
                  ownership of an Abbreviated New Drug Application  (ANDA) filed
                  with the FDA for an  Extended  Release  (XR)  500mg  dosage of
                  Metformin  (the  Product")  as part of an  ANDA  transfer  and
                  licensing agreement with Nostrum Pharmaceuticals, Inc.

                  Nostrum will  cooperate  with the Company in all phases of the
                  work to be performed under the licensing agreement, including,
                  necessary  studies,  validations,  and  tests  related  to the
                  Product.  Until the Company has received ANDA approval for the
                  Product,  Nostrum is to make the  Nostrum  personnel  directly
                  involved  with the  Product  available  to advise and  consult
                  about its  development  and  manufacture.  Nostrum also agrees
                  that its President will be personally available to consult and
                  advise during all aspects of the  development  of the ANDA for
                  the  Product.  The  Company is to  reimburse  Nostrum  for its
                  reasonable  out-of-pocket  expenses incurred in performance of
                  the  obligations   set  forth  in  Section  3.1(c)   Metformin
                  Licensing Agreement.

                  In  May  2006,  in  partial  consideration  for  granting  the
                  license, the Company paid $150,000 to Nostrum. The Company has
                  agreed to make

<PAGE>

                  milestone  payments in further  consideration  for the license
                  granted,  and the following  such payments will be made within
                  30 days of achieving each milestone:

                      (i)   On August 11, 2006 the Company  paid one hundred and
                            fifty  thousand  dollars  ($150,000)  USD  upon  the
                            receipt of approval for ANDA 76-756;

                      (ii)  The Company  agrees to pay to Nostrum  royalties  on
                            net sales of product in the  Territory,  as defined,
                            equal to twenty  percent  (20%) of net sales up to a
                            maximum  of  one  million  five   hundred   thousand
                            ($1,500,000).

Note H -          ACQUISITION FINANCING

                  In May 2006, the Company  consummated  its acquisition of Kirk
                  Pharmaceuticals,   LLC  and  its  subsidiary.   The  aggregate
                  purchase  price was  $12,000,000  (the  "Purchase  Price") (i)
                  $9,000,000 (the "Cash Purchase Price") at the closing and (ii)
                  a  promissory  note  (the  "Kirk  Acquisition  Note")  in  the
                  principal  amount of  $3,000,000.  The Kirk  Acquisition  Note
                  constitutes a general unsecured obligation of the Company.

                  Immediately  prior to the closing of the  acquisition of Kirk,
                  the Company  consummated  two  financings  to satisfy the Cash
                  Purchase  Price  and  its  working  capital  requirements,  as
                  follows:  (i) a credit  facility with Bank of India,  New York
                  Branch (the "Bank of India  Financing");  and (ii) the sale of
                  1,500,000  shares of common stock,  par value $0.001 per share
                  (the  "Common   Stock"),   of  the  Company  to  Maneesh,   an
                  India-based accredited investor (as defined in Rule 501 (a) of
                  Regulation D under the Securities Act of 1933, as amended (the
                  "Securities Act")) (the "Maneesh Investment").

                  The Bank of India  Financing is structured  as senior  secured
                  indebtedness  in the  principal  amount (the  "Principal")  of
                  $10,500,000.  Of the Principal,  $5,250,000 was required to be
                  utilized to satisfy a portion of the Cash  Purchase  Price and
                  $5,250,000  was  required to be utilized  for working  capital
                  purposes (the "Working  Capital Loan").  Of the portion of the
                  Principal  that  represented  the Working  Capital  Loan,  the
                  Company  is  entitled  to  borrow  from time to time an amount
                  equal to 70% of the value of fully paid inventory and accounts
                  receivable  of the  Company  together  with  100%  of  cash in
                  accounts maintained by the Company and its subsidiaries at the
                  Bank of India,  or $5,250,000,  whichever is less. The Bank of
                  India  accrues  interest  at the  prime  rate of  interest  as
                  determined by the Bank of India plus 1.0%. In the event of any
                  default,  such interest rate shall  increase to the prime rate
                  of interest as determined by Bank of

<PAGE>

                  India plus 3.0%. Interest is payable monthly. The Principal is
                  to be repaid with  payments  that  increase  over time through
                  December 31, 2010.

                  Prepayments  will be  subject  to a fee  equal  to 1.0% of the
                  amount  prepaid  for each year or  portion  thereof  remaining
                  between the date of prepayment and December 31, 2010.

                  The  obligations of the Company to the Bank of India Financing
                  have   been   guaranteed   jointly   and   severally   by  its
                  subsidiaries.  The Bank of India has a first priority security
                  interest in the subsidiaries and assets.

                  An officer of the Company has also  guaranteed the obligations
                  to the Bank of India.

                  Simultaneously with the closing of the acquisition of Kirk and
                  the Bank of India Financing,  the Company consummated the sale
                  of the above  mentioned  1,500,000  shares of common  stock to
                  Maneesh. The purchase price was $4.00 per share,  resulting in
                  gross  proceeds of  $6,000,000.  The Company has agreed to pay
                  broker fees in the amount of $525,000  for  services  provided
                  relative to the Bank of India financing,  and $180,000 in cash
                  for services provided in the Maneesh Investment.  In addition,
                  the  Company  has  agreed to issue  300,000  warrants  with an
                  exercise   price  of  $6.00  and  term  of  three   years  for
                  Introduction  Services relative to the Maneesh Investment,  as
                  well as $180,000  in cash plus  45,000  warrants as a finder's
                  fee for the Maneesh Investment.

Note I -          FOOD AND DRUG ADMINISTRATION CORRESPONDENCE

                  The  Company  has  received  a  letter  dated  July  28,  2006
                  summarizing the findings of the periodic  investigation by the
                  United States Food and Drug Administration ("FDA") relating to
                  the   Company's    recently    acquired    subsidiary,    Kirk
                  Pharmaceuticals  ("Kirk").  The  letter  relates  a number  of
                  deficiencies  in the  quality  control  procedures  and  other
                  processes of Kirk.  Specifically and without  limitation,  the
                  letter  describes  discrepancies  in  manufactured  batches of
                  pharmaceutical products,  internal review and record failures,
                  failures to follow production and quality control  guidelines,
                  inadequate  training of personnel,  inadequate  staffing,  and
                  inadequate  laboratory  controls  and product  labeling.  As a
                  result of the Company's due  diligence  investigation  of Kirk
                  prior to the closing of the acquisition, the Company generally
                  anticipated the findings set forth in the letter and is in the
                  process of establishing corrective measures to ensure that the
                  operations  and  procedures  of Kirk address the  deficiencies
                  identified  in the letter and fully  comply with  relevant FDA
                  requirements.

<PAGE>

NOTE J -          ABBREVIATED NEW DRUG APPLICATION APPROVAL

                  In July 2006, the Company  announced that the FDA had approved
                  the Company's ANDA for a generic version of Metformin Extended
                  Release  (XR)  Tablets  500 mg.  Bristol-Myers  Squib  Company
                  markets the therapeutically equivalent listed drug, Glucophage
                  (R) XR Extended-Release  Tablets 500 mg. Metformin is a member
                  of the  biguanide  drug class,  which  represents  the current
                  standard  of care for  type 2  diabetes  management.  The U.S.
                  market for extended release  Metformin is estimated to be more
                  than $150 million annually.  The Company targeting a launch of
                  direct sales program for its generic  Metformin XR Tablets 500
                  mg in the first half of calendar 2007.

NOTE K -          ACQUISITION OF INTANGIBLE ASSET

                  The   Company's   wholly-owned   subsidiary   ANDAPharm,   LLC
                  terminated  its License,  Distribution,  and Supply  Agreement
                  executed on February 3, 2005, as amended on March 4, 2005 with
                  Lehigh Valley Technologies,  Inc. The Termination of Agreement
                  and Assignment of Rights was  effectuated on May 14, 2006, and
                  transfers to ANDAPharm,  LLC all of Lehigh Valley Technologies
                  rights  and   interests   in,  to,  and  under  the   License,
                  Distribution   and  Supply   Agreement  to  license,   market,
                  distribute,  and sell the  generic  form of  certain  estrogen
                  products.  As  consideration,  the  Company  paid  $790,520 to
                  Lehigh Valley Technologies and assumed costs of $131,099.  The
                  intangible  asset is being amortized over its useful life of 5
                  years  and has a net  book  value of  $845,000  as of July 31,
                  2006.

<PAGE>

                         SYNOVICS PHARMACEUTICALS, INC.

ITEM 2.           MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION
                  AND RESULTS OF OPERATIONS

THE FOLLOWING  DISCUSSION OF THE  COMPANY'S  FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS  INCLUDES  CERTAIN  FORWARD-LOOKING  STATEMENTS.  WHEN  USED  IN THIS
REPORT,  THE WORDS "EXPECTS,"  "INTENDS,"  "PLANS" AND "ANTICIPATES" AND SIMILAR
TERMS ARE  INTENDED TO IDENTIFY  FORWARD-LOOKING  STATEMENTS  THAT RELATE TO THE
COMPANY'S FUTURE  PERFORMANCE.  SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES.
THE COMPANY'S  ACTUAL RESULTS MAY DIFFER  MATERIALLY FROM THE RESULTS  DISCUSSED
HERE.  FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE  INCLUDE,  BUT ARE NOT LIMITED
TO, THOSE DISCUSSED UNDER "RISK FACTORS" IN THE COMPANY'S FORM 10-K.

OUR BUSINESS

         Synovics Pharmaceuticals,  Inc. is a pharmaceutical company focusing on
the  development  of  oral   controlled-release   drug  formulations   utilizing
proprietary  drug  formulations and delivery  technologies,  as well as develop,
market  and sell  private  label  other-  the-counter  drugs  through  our newly
acquired . The Company has licensed proprietary  oral-control release technology
with the  rights to develop  exclusively  and  worldwide,  ten  generic  and ten
505(b)(2)  drugs  (improved  formulations  of previously  approved  drugs).  The
Company  intends to invest the majority of its resources in the  development and
commercialization of these products during the next few years.

GENERAL

         The  Company is a  development  stage  company  and is  anticipating  a
prolonged  period of losses  and  negative  cash  flows  while it  develops  and
commences  commercialization  of its  planned  products.  The  Company's  future
operating results will depend largely on its ability to achieve the following:

         -    Debt and equity  financing to support the research and development
              activities

         -    Successful integration of Kirk Pharmaceuticals and ANDAPharm

         -    Successful development and testing of product candidates

         -    Receipt  of  required  regulatory  approvals  related  to  product
              candidates

         -    Commercialization of the Company's products

         -    Gaining a competitive position in the market

DEVELOPMENTS DURING THE THREE MONTHS ENDED JULY 31, 2006

         In  May,  2006  the  Company  acquired  all of the  outstanding  equity
interests in Kirk Pharmaceuticals,  LLC as well as its affiliate ANDAPharm,  LLC
(collectively,  "Kirk").  Kirk is a Florida-based  pharmaceutical  company which
manufactures  over-the-counter  ("OTC") and generic  prescription drugs. Per the
terms of the purchase agreement,  the

<PAGE>

Company paid  $9,000,000  in cash and issued a promissory  note in the principal
amount of $3,000,000. Kirk was founded in 1999 and has grown from 4 employees to
more  than  120 at the  date of this  report.  Kirk has  70,000  square  feet of
manufacturing  space in its U.S. Food and Drug  Administration  ("FDA") and U.S.
Drug Enforcement Agency ("DEA") approved facility and Schedule 2, 3, 3N, 4 and 5
pharmaceutical manufacturing and List I Chemicals certification.  Kirk currently
manufacturers   and/or  markets  more  than  30  OTC  solid  dose  and  soft-gel
pharmaceutical products. These products are manufactured and/or marketed under a
variety of customer specified labels. Kirk's business strategy is to develop and
manufacture  low-cost OTC products in a  streamlined  manufacturing  environment
using  Current Good  Manufacturing  Practices  (cGMP)  guidelines.  ANDAPharm is
engaged in the  development,  manufacture  and/or  marketing  of Rx solid dosage
pharmaceutical products.

         In May 2006, the Company announced that it had obtained ownership of an
Abbreviated New Drug Application (ANDA) filed with the FDA for a generic version
Metformin  Extended Release (XR) 500mg dosage (the "Product") as part of an ANDA
transfer and licensing agreement with Nostrum  Pharmaceuticals,  Inc. Nostrum is
obligated per sales  agreement with the Company to cooperate with the Company in
all phases of the work to be performed under the licensing agreement, including,
necessary studies,  validations, and tests related to the Product. In July 2006,
the Company  announced  that the FDA had  approved  the  Company's  ANDA for the
Product.  Bristol-Myers  Squib Company  markets the  therapeutically  equivalent
listed drug, Glucophage (R) XR Extended-Release Tablets 500 mg. The Product is a
member of the biguanide drug class,  which  represents  the current  standard of
care for type 2  diabetes  management.  The U.S.  market  for  extended  release
Metformin is estimated to be more than $150 million annually.  The Company plans
to launch a direct sales program for its generic  Metformin XR Tablets 500 mg in
the first quarter of calendar year 2007.

         In June 2006,  the Company  announced that it had initiated the process
for U.S.  chemical,  manufacturing and control ("CMC")  development of its third
controlled-release  generic drug candidate,  SNG1003.  The Company is developing
three doses of SNG1003 (a, b, and c), which together address a branded drug with
annualized sales in excess of $500 million.  Concurrently,  the Company plans to
conduct   pivotal   biostudies   according  to  FDA  guidelines  to  demonstrate
bioequivalency  that the  Company  believes  will  provide  confirmation  of the
successful  formulation  and  biostudies  data achieved in India.  Following the
successful  completion of development  efforts with SNG1003a,  b, and c, and the
Company's  previously  announced  drug  candidates,  SNG1001a and SNG1002a,  the
Company  expects  to file a series of ANDAs  with the FDA.  There is no  current
generic  version nor ANDA filed with the FDA for the brand  targeted by SNG1003.
If this situation  remains when the Company files its intended ANDA, it could be
awarded a period of marketing  exclusivity.  The Company is targeting  its first
ANDA filing on these generic drug candidates the first quarter of 2007,  subject
to  successful  completion  of its  development  and  testing  program  for  the
products, of which there can be no assurance of such successful completion.

<PAGE>

FOCUS FOR REMAINDER OF 2006

         The  Company's  primary focus for the remainder of 2006 will be to work
with Kirk  Pharmaceuticals'  management to achieve  compliance with relevant FDA
regulations.  The  Company  will also  continue  its  efforts to secure debt and
equity   financing  to  support   operations,   further  its   development   and
"bioequivalency"  studies of SNG1001a,  SNG1002a,  SNG1003 a, b, c as well as to
further its research and  development  program on other drug candidates in order
to be in a position to realize the potential of its licensed technology.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JULY 31, 2006 COMPARED WITH THREE MONTHS ENDED JULY 31, 2005.

         Consolidated  gross  revenues  for the quarter  ended July 31, 2006 was
$5,354,000  compared to $2,564 for the same  quarter in 2005.  This  increase in
revenue  represents  sales from OTC  products of the  Company's  newly  acquired
subsidiary, Kirk Pharmaceuticals.  Kirk Pharmaceuticals' three largest customers
represented  approximately 75% of the sales for the period. Although the Company
believes Kirk Pharmaceuticals has good working  relationships with each of these
customers,  Kirk Pharmaceuticals is working to further  relationships with these
and other entities in order to broaden its sales base.

         Sales of products  containing  ephedrine and guaifenisen  accounted for
approximately 75% of sales. These products have come under increasing government
regulation   due  to  the  concern  of  these  products  in  the  production  of
methamphetamine.  These  regulatory  changes  have  affected  the way  that  the
products  are packaged  and how they may be  displayed  in retail  outlets.  The
Company complies with all regulations regarding these products and overall sales
for the products have not declined from historical  levels. The Company complies
with both FDA and DEA regulations with respect to these products.

         Kirk   Pharmaceuticals   has  several   other  OTC  products   that  it
manufactures and/or markets and is continuing to develop  relationships based on
these and other products.

         During the quarter ended July 31, 2006,  the Company's  newly  acquired
subsidiary,  ANDAPharm  had one product which was awaiting  regulatory  approval
with respect to labeling requirements, of which approval was received subsequent
to the close of the  quarter.  As a result,  ANDAPharm  had no sales  during the
period.

<PAGE>

ANDAPharm has established a contractual  relationship  with a company to provide
marketing  and sales  efforts for the recently  approved  product.  The contract
requires the marketing partner to achieve certain minimum quantities in order to
retain  exclusive  rights to this  product.  If the partner does not achieve the
necessary  minimum levels,  ANDAPharm may retain  additional  partners to market
this  product.  As part of the  development  of this  product,  ANDAPharm  had a
separate  development  contract  with an  independent  third  party.  During the
quarter,  ANDAPharm purchased the partner's rights under this contract. The cost
of the buyout of the partner was $791,000.  There are no future  obligations  to
this development partner.

         ANDAPharm's  other  activities  during  the  quarter  consisted  of the
continued development of other products, in preparation for submission to the US
regulatory authorities.  Several of these products are on behalf of the Company.
In addition,  ANDAPharm has been meeting with other companies for the purpose of
entering  into  joint   development  and  or   manufacturing   and/or  marketing
agreements.

         Both  Kirk   Pharmaceuticals  and  ANDAPharm  are  subject  to  various
regulatory  bodies including the DEA and the FDA. The Company believes that each
subsidiary's relationship with both of these regulatory bodies is good. In July,
Kirk  Pharmaceuticals  underwent an inspection by the FDA. The inspection was in
the  normal  course  of  business,  as Kirk  Pharmaceuticals'  prior  inspection
exceeded two years ago. The inspection pointed out several  shortcomings in Kirk
Pharmaceuticals' operations. However, Kirk Pharmaceuticals cooperated fully with
the FDA  inspectors,  has  responded  to the FDA and is  working  diligently  to
correct the weaknesses  that were noted during the  inspection.  The Company and
each  subsidiary  has and will continue to comply with the  requirements  of the
regulatory agencies.

         The Company expects to continue to incur operating losses as it invests
in product  development  and clinical trials  research.  The Company is pursuing
potential  development  and  marketing  arrangements  with other  pharmaceutical
companies  regarding its licensed products.  However,  there can be no assurance
that the Company will be  successful  in these  efforts or that any  arrangement
would generate sufficient revenue to fund operations.

         Cost of  revenues  for the three month  period  ended July 31, 2006 was
$3,886,668 compared to $382 for the three month period ended July 31, 2005. This
increase in cost of revenue  represents the costs associated with the sales from
over-the-counter  products of the  Company's  newly  acquired  subsidiary,  Kirk
Pharmaceuticals.

         Research and development expenses for the three month period ended July
31, 2006 was $570,942 compared to $210 for the three month period ended July 31,
2005. This increase is due primarily to research and  development  activities at
the Company's  subsidiary,  Kirk  Pharmaceuticals.  The research and development
expenses are in line with  historical  norms of the acquired  subsidiaries,  and
contain no  significant,  unusual  expenses.  Research and  development  expense
consists of direct costs which  include  salaries and related  costs of research
and development personnel, and the costs of consultants,  materials and supplies
associated with research and development projects, as

<PAGE>

well as clinical  studies.  Indirect  research  and  development  costs  include
facilities, depreciation, and other indirect overhead costs.

         Selling,  general,  and  administrative  expenses  for the three  month
period ended July 31, 2006 was  $1,445,511 as compared to $167,255 for the three
month period ended July 31, 2005.  This increase is due primarily to an increase
in salaries,  consulting,  travel,  accounting  and legal,  as well as operating
activities  associated  with the  Company's  newly  acquired  subsidiaries.  The
operating   expenses  are  in  line  with  historical   norms  of  the  acquired
subsidiaries, and contain no significant, unusual expenses.

         The net loss of  $1,531,499,  or $.06 per  share,  for the three  month
period  ended July 31, 2006 was due  primarily  to the  Company's  inability  to
generate  sufficient cash flow to support  operations.  The Company also expects
cumulative  losses to increase due to its research  and  development  activities
related to the license agreement with Nostrum.

NINE MONTHS ENDED JULY 31, 2006 COMPARED WITH NINE MONTHS ENDED JULY 31, 2005.

         Consolidated  gross  revenues  for the nine month period ended July 31,
2006 was $5,356,115  compared to $7,656 for the nine month period ended July 31,
2005.  This  increase  in  revenue  represents  sales from OTC  products  of the
Company's newly acquired subsidiary, Kirk Pharmaceuticals.

         Cost of  revenues  for the nine month  period  ended July 31,  2006 was
$3,887,003  compared to $1,221 for the nine month  period  ended July 31,  2005.
This increase in cost of revenue  represents the costs associated with the sales
from  OTC  products  of  the   Company's   newly   acquired   subsidiary,   Kirk
Pharmaceuticals.

         Research and development  expenses for the nine month period ended July
31, 2006 was  $895,429  compared to $13,166 for the nine month period ended July
31, 2005. This increase in cost of revenue  represents the costs associated with
the  sales  from  over-the-counter  products  of the  Company's  newly  acquired
subsidiary, Kirk Pharmaceuticals.

         Selling, general, and administrative expenses for the nine month period
ended July 31,  2006 was  $2,826,986  compared  to  $708,345  for the nine month
period  ended  July 31,  2005.  This  increase  is due  primarily  to  salaries,
consulting,  travel,  legal  and  accounting,  as well as  operating  activities
associated  with  the  Company's  newly  acquired  subsidiaries.  The  operating
expenses are in line with  historical  norms of the acquired  subsidiaries,  and
contain no significant, unusual expenses.

         The net loss of  $4,982,654,  or $.21  per  share,  for the nine  month
period  ended July 31, 2006 was due  primarily  to the  Company's  inability  to
generate  sufficient cash flow to support  operations.  The Company also expects
cumulative  losses to increase due to its research  and  development  activities
related to the license agreement with Nostrum.

<PAGE>

         The  Company  did  not  engage  in any  unusual,  infrequent  event  or
transaction or any significant economic changes that would materially affect the
amount of income reported from continuing operations. Nor did the Company engage
in any off-balance sheet transactions.

LIQUIDITY AND CAPITAL RESOURCES

         To  date,  the  Company's  operations  have  not  generated  sufficient
revenues to satisfy  the  Company's  operating  capital  needs.  The Company has
financed its operations primarily through the sale of its common stock, warrants
and debt by means of private  placements.  The Company  had  working  capital of
$610,366  at July  31,  2006 as  compared  with a  working  capital  deficit  of
$3,913,000 at October 31, 2005.  Cash and cash  equivalents  were  $4,218,739 at
July 31, 2006,  as compared  with  $128,819 at October 31, 2005,  an increase of
$4,089,920.

         Net cash used in  operating  activities  during the nine  month  period
ended July 31, 2006 was $3,185,216. This resulted from the Company's net loss of
$4,982,564,  offset in part by certain  non-cash items  attributable to expenses
including,  but not  limited  to the  disposition  of its  investment  in  InCon
Processing of  $1,042,119,  amortization  of bridge note discount of $1,094,216,
and depreciation expense of $26,570. The Company has generally incurred negative
cash flows from operations since inception,  which will continue due to research
and development activities related to the License Agreement with Nostrum.

         Net cash used in  investing  activities  during the nine  month  period
ended July 31, 2006 was $10,112,021.  This resulted from capital expenditures of
equipment of $167,021 patent  acquisitions of $1,145,000 and consummation of the
Kirk acquisition of $8,800,000.

         Net cash provided by financing  activities during the nine month period
ended July 31, 2006 was  $17,387,157,  which  resulted  from the net proceeds of
commons stock issuance of $5,640,000,  proceeds from debt of  $12,359,362,  less
repayment of $259,000 in debt and $270,422 in leases.

         The  Company  did not  enter  into  any  material  capital  expenditure
agreements,  nor did it engage in any off  balance  sheet  financing  during the
reporting period.

The following  table depicts our obligations and commitments as of July 31, 2006
to make future payments under existing contracts or contingent commitments.

<TABLE>
<CAPTION>
----------------------------------------- -----------------------------------------------------------------------
                                                                  PAYMENTS DUE BY PERIOD
----------------------------------------- -----------------------------------------------------------------------
                                                         LESS THAN 1                                   AFTER 5
----------------------------------------- ------------- --------------- -------------- ------------- ------------
CONTRACTUAL OBLIGATIONS                      Total           YEAR         1-3 YEARS     4-5 YEARS       YEARS
----------------------------------------- ------------- --------------- -------------- ------------- ------------
<S>                                       <C>             <C>             <C>           <C>               <C>
Short - Term Debt Obligations
through 07/31/06                             $102,000       $102,000           $0           $0            $0
----------------------------------------- ------------- --------------- -------------- ------------- ------------
Current Portion of Long-Term
Obligations thru 07/31/06                   2,587,000      2,587,000
----------------------------------------- ------------- --------------- -------------- ------------- ------------
Long - Term Obligations thru 07/31/06      14,824,000        250,000       10,263,000    4,311,000         0
----------------------------------------- ------------- --------------- -------------- ------------- ------------
Total                                     $17,513,000     $2,939,000      $10,263,000   $4,311,000        $0
----------------------------------------- ------------- --------------- -------------- ------------- ------------
</TABLE>

<PAGE>

All  trends,  demands,  commitments,  events and  uncertainties  resulting  in a
material increase or decrease in liquidity have been reported.  All internal and
external sources of liquidity have been identified, and all material commitments
of capital expenditures as of the end of the quarter have been identified.

FUTURE CAPITAL REQUIREMENTS

         All of the  Company's  product  candidates  are in the early  stages of
research and development,  and will require  additional  research,  development,
clinical  testing,   regulatory  approval,   and  a  commitment  of  significant
additional resources prior to commercialization.  Based on its current operating
plan,  the Company has  sufficient  capital  resources  to meet its  obligations
through the fourth  quarter of 2006.  The Company can provide no assurance  that
additional debt or equity funding will be obtained. The Company's future capital
requirements will depend on many factors, including the following:

         -    Continued scientific progress in its research,  drug discovery and
              development plans

         -    Size of its program and progress with clinical trials

         -    Time and costs associated with regulatory approvals

         -    Recruitment of key management

REGULATORY APPROVAL

         The Company must conduct  time-consuming  and costly clinical trials to
show  safety and  efficacy in each of its  product  candidates  before a product
candidate  may be  approved  for  distribution.  The  clinical  trials  must  be
conducted in accordance with the FDA  regulations.  If the FDA believes that the
Company has not  sufficiently  demonstrated  safety and  efficacy in its product
candidates,  it will not  approve  them,  or will  require  additional  clinical
studies,  which will require additional time and resources.  The Company may not
be able to obtain the necessary  regulatory  approval on a timely  basis,  if at
all, for any of its product  candidates.  Failure to receive these  approvals or
delays in the approvals may prevent or delay commercialization of a product, and
as a result,  could negatively impact the Company's ability to generate revenue.
The Company can give no assurances  that any of its product  candidates  will be
safe and effective,  will be approved for commercialization,  or that it will be
successful in the commercialization of these products.

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The  Company  does  not  invest  in or own any  market  risk  sensitive
instruments entered into for trading purposes or for purposes other than trading
purposes.  All loans to the Company  have been made with fixed  interest  rates,
and, accordingly,  the market risk to the Company prior to the maturity of those
instruments is minimal.

ITEM 4.  CONTROLS AND PROCEDURES.

         The  Company's   management  is  responsible   for   establishing   and
maintaining a system of disclosure  controls and  procedures (as defined in Rule
13a-15(e) and 15d-15(e)  under the Exchange Act) that is designed to ensure that
information  required to be  disclosed  by the  Company in the reports  that the
Company  files  or  submits  under  the  Exchange  Act is  recorded,  processed,
summarized and reported,  within the time periods  specified in the Commission's
rules and forms. Disclosure controls and procedures include, without limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  by an  issuer  in the  reports  that it files or  submits  under  the
Exchange  Act  is  accumulated  and  communicated  to the  issuer's  management,
including its principal  executive  officer or officers and principal  financial
officer or officers, or persons performing similar functions,  as appropriate to
allow timely decisions regarding required disclosure.

         In accordance with Exchange Act Rules 13a-15 and 15d-15,  an evaluation
was completed under the supervision and with the  participation of the Company's
management,  including  the Company's  President,  Chief  Financial  Officer and
Secretary,  of the  effectiveness  of the design and  operation of the Company's
disclosure  controls and  procedures as of the end of the period covered by this
Quarterly Report.  Based on that evaluation,  the Company's management including
the  President,  Chief  Financial  Officer  and  Secretary,  concluded  that the
Company's disclosure controls and procedures are effective to provide reasonable
assurance  that  information  required to be disclosed in the Company's  reports
filed or submitted  under the Exchange Act is recorded,  processed,  summarized,
and reported  within the time periods  specified in the  Commission's  rules and
forms. There have been no significant changes to the Company's internal controls
or other factors that could significantly affect internal controls subsequent to
the period covered by this Quarterly Report.

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         The  Company  is not party to any  legal  proceedings  that  management
believes would have a material adverse effect on the business of the Company.

ITEM 1A. RISK FACTORS.

         The  Company  has  had no  material  changes  to its  risk  factors  as
previously  disclosed  in its Form 10-K filed with the  Securities  and Exchange
Commission on January 30, 2006.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         In May 2006, the Company  entered into a stock purchase  agreement with
Maneesh  Pharmaceuticals  Pvt.  LTD.,  for the issuance of  1,500,000  shares of
common  stock at an  aggregate  price of  $6,000,000.  This  equity  transaction
provided  working  capital  to the  Company,  permitting  it to  consummate  the
Company's acquisition of Kirk Pharmaceuticals,  LLC and its affiliate ANDAPharm,
LLC. The issuance was made pursuant to Section 4(2) of the Securities Act.

         In May 2006,  the Company  issued  1,862,890  shares of common stock at
$1.00 per share to the Note  holders  under the Multiple  Advance  Non-Revolving
Notes,  pursuant to the terms of the  convertible  note issued on June 20, 2001.
The issuance was made pursuant to Section 4 (2) of the Securities Act.

         Each purchaser  represented that they acquired the securities for their
own  account.  A legend was placed on each stock  certificate  stating  that the
securities have not been registered  under the Securities Act and cannot be sold
or  otherwise  transferred  without an  effective  registration  or an exemption
therefrom.  Each purchaser of the Company's securities were either an accredited
investor or employee of the Company.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Reference is made to that certain Form 8-K dated September 1, 2006 and
filed on September 14, 2006.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

ITEM 5.  OTHER INFORMATION.

                       On September 8, 2006, Nostrum  Pharmaceuticals,  Inc. and
         Nirmal Mulye,  Ph.D.  filed  Schedule 13D with the U.S.  Securities and
         Exchange Commission.  Nostrum Pharmaceuticals owns 10,661,000 shares of
         the

<PAGE>

         Company's  Common  Stock.  All shares of Common Stock were acquired for
         investment purposes and as consideration for the pharmaceutical license
         agreements referred to in Part I Item 2. Nostrum may acquire additional
         shares, dispose of some or all of the shares from time to time, in each
         case in open market or private  transactions,  block sales or purchases
         or otherwise, or may continue to hold shares.

         On September 18, 2006, Nostrum and Dr. Mulye filed an amendment to such
         Schedule  13D  indicating  that Dr.  Mulye  resigned  from the Board of
         Directors of the Company  effective  September  15,  2006.  The Company
         intends  to file a  Current  Report  on Form 8-K with  respect  to such
         resignation.

ITEM 6.  EXHIBITS.

(a)      Exhibits

         3.(ii).1 By-Laws, as amended through September 8, 2006

         31.1     Certification  of Chief  Executive  Officer  pursuant to Rules
                  13a-14(a) and 15d-14(a) of the Securities Exchange Act

         31.2     Certification  of Chief  Financial  Officer  pursuant to Rules
                  13a-14(a) and 15d-14(a) of the Securities Exchange Act

         32.1     Certification of Chief Executive Officer pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002

         32.2     Certification of Chief Financial Officer pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002

<PAGE>

(b)      Reports on Form 8-K

         (1)      Form 8-K filed on September 14, 2006  regarding two amendments
                  to the  Company's  by-laws  and the  Company's  adoption  of a
                  Rights Agreement.

         (2)      Form 8-K filed on  September  14,  2006  regarding  promissory
                  notes payable on September 1, 2006.

         (3)      Form  8-K  filed on  August  22,  2006  regarding  the  letter
                  received by the  Company's  newly  acquired  subsidiary,  Kirk
                  Pharmaceuticals,  relating a number of  deficiencies in Kirk's
                  operations.

         (4)      Form 8-K  filed on  August 3,  2006  regarding  the  Company's
                  announcement   that  it  has  received  FDA  approval  on  the
                  Company's  Abbreviated  New  Drug  Application  for a  generic
                  version of Metformin Extended Release (XR) Tablets 500 mg.

         (5)      Form  8-K/A  filed on July 28,  2006  regarding  the pro forma
                  financial   statements  of  Kirk   Pharmaceuticals,   LLC  and
                  ANDAPharm, LLC.

         (6)      Form 8-K  filed  on June  12,  2006  regarding  the  Company's
                  announcement  that  it has  initiated  the  process  for  U.S.
                  chemical  manufacturing  and control  development of its third
                  controlled-release drug candidate.

         (7)      Form 8-K filed on May 31,  2006 to amend and  update  exhibits
                  under Item 9.01(c) of the Form 8-K filed on May 26, 2006.

         (8)      Form 8-K  filed on May 26,  2006  regarding  consummating  the
                  acquisition of Kirk and raising $21.25 Million in Financing.

         (9)      Form 8-K filed on May 19, 2006  regarding  the addition of new
                  Key Management joining the Company.

         (10)     Form  8-K  filed  on May  19,  2006  regarding  the  Company's
                  acquisition of its first Application for Approval of a Generic
                  Drug with the FDA.

<PAGE>

                         SYNOVICS PHARMACEUTICALS, INC.


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                   SYNOVICS PHARMACEUTICALS, INC.
                                   (Registrant)

Date:  September 18, 2006          By: /s/ Ronald H. Lane
                                       -----------------------------------------
                                       Ronald H. Lane
                                       (President, Chief Executive Officer, and
                                       Principal Accounting Officer)